Many states have laws providing remedies for customers who purchase chronically bad vehicles, known colloquially as “lemons”. What can one say to the American taxpayer, after nervous lawmakers got together to give away $15 billion more of China’s American taxpayer’s money in an apparent auto-maker bailout deal… buying not merely clunker cars, but clunker car companies?
I’ve got your auto bailout right here, America. Fuggedabout the $25 billion asked for; the federal government will pay twice that– $50 billion– immediately secured by the outstanding shares of all three automobile makers; in return, the auto makers will obtain long term contracts for the provision of all fleet vehicles to the federal government (and to state and municipal governments under issuance in lieu of various block grants). Each vehicle produced under this arrangement shall be at the current “most fuel efficient” level technologically available, and, by contract, this efficiency shall improve by at least 5% per year for the duration of the contract (and greenhouse emissions, by contract, will decline by at least 5% per year).
And the auto-makers will be provided to produce a certain number of electric and alternate fuel vehicles, and shall be obliged as part of the contract to install the appropriate infrastructure for serviving them. Further, the companies shall engage in necessary structural reforms, including a one-time opportunity to permit their retirees and workers to buy in to the federal employees’ health care and retirement systems, for discounted benefits (but far better than what they would be should their former employers tank).
In short: help private sector companies by actually buying their products, and using market forces and government buying power to improve their performance, rather than simply giving money to our auto-makers a la the Soviet Lada or the Yugoslavian Yugo.
Free market capitalism… we got what you need right here, America.
tdog
Interesting proposal, TD. What was the source of your inspiration? And, if successful, as to the health care and retirement systems, perhaps other companies could participate. Of course, how would you account for the untold billions already owed by the Big Three to their retirement plans? I think I read once that GM’s obligations alone would cripple the Pension Benefit Guaranty Corporation.
JW:
I would permit each beneficiary the option of joining the federal workers’ program for a reduced set of benefits (GM, Ford, etc. would have to fork over a portion of their funded pension to compensate the feds for taking the pensioner off their books), OR the worker would have the option of staying on GM’s, FOrd’s, etc. books for their more generous benefits, and taking their chances that GM, Ford, etc. could some day fund their obligations, or even be around to do it. It’s not perfect, it’s not really “fair,” but God knows it’s infinitely superior to those who depended on pensions from Enron, Worldcom, etc.
The goal, ultimately, btw, would be to greatly broaden the federal retiree and health and the Medicare programs to as many non-federal workers in the economy as possible… “if this be socialism, let’s make the most of it”… with the auto companies as a beach head (turned to “in desperation” of course), kind of like how Bush used Homeland Security as his beach head for union busting.